Savers who have variable rate accounts with AIB International need to act now
or they will lose money.

Time is running out for the remaining savers withAIB International. With effect from Monday, August 20, AIB International is no longer paying any interest on its variable rate savings accounts.

While this news shouldn’t come as a surprise to savers, as the bank has been gradually reducing its rates since the spring when it announced it was closing down its Isle of Man operations, there will undoubtedly be some with these accounts yet to move their money away. Those with variable rate accounts need to act now or they will be losing money.

WhenAIB announced it was closing down AIB International, it had about 20,000 savers. A spokesman for AIB in Dublin would not disclose how many remain but said: “The orderly wind-down process continues and we are engaging fully with customers throughout the process”.

Savers with AIB International who have fixed rates will continue to earn interest at the rates they invested at until their bonds mature. However, if they want to move away before the end of the term of their fixed rate, they can do so without penalty.

As AIB International specialised in short-term fixed-rate bonds of a year or less, there will still be some savers who may be with AIB International well into next year. If you are one of these savers, you need to keep a note of when your bond is due to mature and make sure you move your money as soon as it does, because once it does there will be no interest paid on your matured deposit.

In addition, the remaining savers with AIB International should be aware that from the end of this month they will no longer be covered by the Irish government’s Eligible Liabilities Guarantee Scheme.

This scheme 100pc guarantees all deposits with Irish banks, including their offshore subsidiaries, until the end of this year. The guarantee was brought in by the Irish government in 2009 to bring some stability to the Irish financial system. As AIB International is being wound down, it has been decided that it will no longer be covered by this promise. AIB International savers do however remain covered by the Isle of Man Depositors’ Compensation Scheme, which guarantees deposits up to £50,000.

For those now leaving AIB International, what are the best deals from the banks that remain open to offshore savers? As well as short-term fixed rates, AIB International used to offer a very good easy access account that once topped the interest rate tables. Currently, there are two easy access accounts that stand out:Nationwide International’s Bonus Access Issue 2 and Alliance & Leicester International’s eSaver access.

The Nationwide account pays 2.5pc on balances of £25,000 plus, but that includes a two percentage point bonus for the first year: do keep a note of the date so you can check the rate is still competitive after a year. The Alliance & Leicester deal is simpler in that there is no bonus on the interest rate of 2.45pc and it is on a lower balance of £5,000 plus. Both these deals are a long way above their closest rivals:Lloyds TSB Internationalpays 2.01pc on a minimum £100,000 and Britannia Internationaloffers 2pc on £50,000 plus.

For very short-term fixed rates, the remaining Irish-owned offshore banks have the best deals. You can fix for six months withPermanent Bank Internationalat 2.92pc on a minimum £100,000 or Bank of Ireland (IOM)has 2.77pc for the same time period on £25,000 plus. Or for six months, Permanent Bank International has 3.11pc.

Deposits with both Permanent Bank International and Bank of Ireland (IOM) are covered by both the Isle of Man scheme and the Irish government scheme.

With these very short-term fixed-rate accounts, it’s usual on maturity for your money to be rolled into a new bond of similar length unless you say otherwise.

If you don’t want such a short term option, then there are still two one-year bonds paying 3.5pc: Permanent has this rate on a minimum £20,000 and Bank of Ireland offers it on £25,000 plus. If you want an alternative, Britannia International has 3.25pc on a minimum £5,000, or there’s a newly-launched one-year deal from Skipton International at 2.9pc on a minimum £10,000.